Arizona Bonded Title Process

Aug 24 Posted on

If you want to register a vehicle you have purchased or been given but do not have a title for it, there is a process that will enable you to obtain a bonded title. A bonded title is a title with a surety bond attached to protect the MVD and the rightful owner if it turns out that someone else has a legitimate ownership interest in the vehicle. Learn more about the Arizona bonded title process below, and contact Single Source Insurance to get the bond you need today.

Who Needs a Bonded Title?

Not everyone who lacks a title for a vehicle needs to go through the somewhat complicated process for getting a bonded title. If you once had a title for the vehicle in question at one point but no longer do, you can get a duplicate title from your local DMV office for only three dollars.

If you never had a title for the vehicle, or if the title is defective in some way, you�ll have to apply for a bonded title.

How Does the Process Work?

There are several steps you�ll need to take before you can even submit an application for a bonded title. Here�s what you need to know about the Arizona bonded title process:

  1. If your vehicle is an in-state vehicle, ask your local MVD office to perform a motor vehicle record search to identify the person that most recently held the title to the vehicle. This will cost you $3. For an out-of-state vehicle, you�ll need to work with the other state�s MVD.
  2. If the vehicle record search turns up a lien on the vehicle, you�ll need to obtain a lien release that specifies the vehicle�s year of manufacture, make, and VIN.
  3. Have a law enforcement officer perform a Level 1 inspection. Everyone applying for a bonded title in Arizona must have this done to verify the VIN and ensure that the vehicle has not been reported as stolen.
  4. Send certified letters to anyone whose name appears on the record search from Step 2, as well as to anyone involved in selling the vehicle to you, requesting that they sign the title over to you and send it to you or send you a notarized letter stating that they have no ownership interest in the vehicle. Make it clear that they have 30 days to respond.
  5. If you get an answer to your certified letter(s), you will either have the title to the vehicle or you all the documentation you need to obtain a new title�without any need for a surety bond. If you get no response, obtaining a surety bond is mandatory.
  6. Fill out and sign a Bonded Title Affidavit (available from the Arizona MVD) to explain how you acquired the vehicle and why you don�t have a title for it.
  7. Take your completed application and all of the documentation you�ve gathered (including the responses to your certified letters, or proof that you sent letters if you received no response) to the MVD office for review and determination of the vehicle�s value. You may be told you need to get your vehicle inspected at this point.
  8. Purchase a 3-year Arizona title bond with a bond amount equal to 1.5x the value MVD assigned to the vehicle. The bond certificate will arrive in the mail.
  9. Take the bond and all other documents to the MVD for approval and issuance of a bonded title.

The bond is your guarantee that you are the rightful owner of the vehicle. At any time during the three years that the bond is in force, anyone with a legitimate ownership interest in the vehicle can come forward and file a claim against the title bond. The MVD itself can also file a claim if there is reason to believe you should not have been given a bonded title.

The surety company may pay the claim for you to expedite matters, but you must then reimburse the company in full. Even if you sell the vehicle during that 3-year period, you remain obligated to pay any valid claims against the bond.

What Does It Cost?

You will pay a small percentage of the bond amount as the premium for the title bond. At Single Source Insurance, all Arizona bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

At Single Source Insurance, our experienced surety bond agents are well acquainted with the lost title bonding process and will help you get the Arizona title bond you need at the best possible premium rate.

Read More »

Texas Bonded Title Process

Aug 23 Posted on

Don�t sweat it if you don�t have a title for a vehicle you want to register. There�s a process to obtain a new title if you never got one when you bought a vehicle, were given a flawed or incorrect title, or received a perfectly good title but lost it before you had a chance to register the vehicle. Learn more about the Texas bonded title process below, and contact Single Source Insurance to get the bond you need today.

What Is a Bonded Title?

A bonded title allows you to register a vehicle even if there is a possibility that someone will later turn up and challenge your ownership of the vehicle. This article walks you through the process for obtaining a bonded title in Texas, step by step.

Who Needs a Bonded Title?

If you want to register a vehicle for which you don�t have a good title or to transfer ownership of the vehicle to someone else, you�ll need to get a bonded title. To qualify for a bonded title:

  • You must be a resident of Texas or be stationed in Texas on military duty
  • You must have possession of the vehicle
  • The vehicle cannot be abandoned, stolen, junked, or the subject of a pending lawsuit, and it must be a complete vehicle, with a motor and frame, though it need not be operational
  • There cannot be any liens against the vehicle

How the Process Works

The state�s main concern is trying to establish your ownership of the vehicle, so the Texas bonded title process will involve filling out forms and obtaining the appropriate signatures.

  1. Complete Form VTR-130-SOF, �Statement of Fact for Bonded Title.� One of the items on the checklist provided on the form is a pencil tracing of the vehicle’s VIN plate. Another is the current value of the vehicle as appraised by a licensed motor vehicle dealer or insurance adjuster and recorded on Form VTR-125, or from a nationally recognized valuation guide such as the National Auto Dealers Association reference guide.

    Bring or mail the completed form to your local DMV office along with any evidence you have to help prove your ownership, such as a Bill of Sale, invoice, payment receipt, or cancelled check. Be prepared to pay the $15 administrative fee (by cash, check, or money order).

    Completing this application for a bonded title is rather straightforward if the vehicle was previously titled and/or registered in Texas, but if not, an additional step is necessary.

  2. Take the vehicle to a Texas certified Safety Inspection Station and request verification of the VIN on a Vehicle Inspection Report.Only for vehicles not previously titled and/or registered in Texas. You’ll also need to have a VIN inspection performed by an auto theft investigator in the local police or sheriff’s office, to be documented on a Form VTR-68-A, “Law Enforcement Vehicle Identification Number Inspection.” This form also includes questions you must answer about the vehicle, how you got it and why you don’t have a valid title for it.
  3. Upon approval of all forms and documents submitted, the DMV will send you a letter telling you the required amount of the title bond you will need to purchase. The amount will be 1.5x the appraised value of the vehicle, unless the vehicle is 25 or more years old, in which case the value will be the actual amount from the bill of sale or $4,000, whichever is higher.
  4. The approval letter is good for one year. Within that year, you must purchase a three-year Texas title bond.
  5. Within 30 days of purchasing the surety bond, take the following to your county�s tax office:
  • the approval letter from the DMV
  • all documents you submitted with your bonded title application
  • the surety bond certificate
  • proof that the vehicle is insured
  • a completed �Application for Texas Certificate of Title�
  • If the vehicle is an import, you�ll also need to provide a Customs Declaration.

You will receive a Texas bonded title, which protects the DMV and anyone with a legitimate ownership interest in the vehicle from financial loss.

The title bond remains in place for three years. If nobody contests the vehicle�s ownership by filing a claim against the bond within that time, at the end of the three years, the DMV will issue an unbonded title.

What Does It Cost?

You will pay a small percentage of the bond amount as the premium for a vehicle title bond. At Single Source Insurance, all Texas bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

Contact Single Source Insurance today for all of your bonding needs. You can count on us to get you the best possible deal on a Texas title bond.

Read More »

Florida Bonded Title Process

Aug 22 Posted on

This article outlines the steps required to obtain a new title in Florida when ownership of a vehicle has not been transferred or definitively established. One key step in the process of obtaining a new title is purchasing a Florida Title Bond, which protects the public and the Department of Highway Safety and Motor Vehicles (DHSMV) against financial loss in the event that a new title is issued to someone who is not a vehicle�s rightful owner.

Learn more below, and contact Single Source Insurance to get the bond you need today.

What Is A Bonded Title?

A bonded title is proof of ownership for people who have purchased a vehicle but don�t have a properly assigned title they can use to register it. Perhaps they were never given a title by the seller, or maybe they received a title that was not properly signed over to them, or they lost it before it was transferred into their name.

Who Needs a Bonded Title?

The only way to know for certain whether you are eligible for a bonded title is to ask your local DHSMV office. Explain the exact circumstances, and they will inform you as to whether or not you can get a bonded title.

Keep in mind that you are not eligible if the vehicle in question was last registered in a state other than Florida. DHSMV can tell you what other options you may have for getting your vehicle registered in such cases.

You don�t need a bonded title if you have misplaced a title that was already in your name. In such cases, you can get a duplicate certificate by applying for one from DHSMV and paying a replacement title fee.

How the Process Works

Here are the key steps in the Florida bonded title process:

  • Complete Part A of DHSMV form HSMV 82042, �Vehicle Identification Number and Odometer Verification.� This involves signing an affidavit and an odometer declaration.
  • Have a Florida Notary Public, licensed auto dealer, police officer, tax collector, or DHSMV employee do a physical check of the vehicle to verify the VIN and the odometer reading and complete part B of the HSMV 82042 form confirming that information.
  • Complete and sign the �Affidavit to Accompany Application for Bonded Title� form, HSMV 82026. This is your attestation that you are the rightful owner of the vehicle in question.
  • Purchase a Florida title surety bond for twice the appraised value of the vehicle. Use the Kelly Blue Book or NADA national appraisal guide to get an idea of the bond amount required—but the surety company will do their own calculation as well.
  • Complete the HSMV 82042 form, �Florida Application for Certificate of Title With/Without Registration.�
  • Submit all completed paperwork to DHSMV. Upon approval, you will receive your bonded title from the DHSMV.

What Happens if a Claim is Filed?

Title bonds cannot be cancelled or refunded, because a claim could be filed against a bond at any time. It could be years before a lien holder or previous owner surfaces and makes a claim for the vehicle being fraudulently titled. In that event, or when any other valid claim is made against a title bond, the surety company that issued the bond will pay it�then they will turn to the person that purchased the bond for reimbursement.

What Does It Cost?

The premium for a Florida title bond is a small percentage of the required amount of the bond, which is twice the appraised value of the vehicle. At Single Source Insurance, all Florida bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

Contact us today for help understanding the Florida bonded title process or to request a quote on the bond you need in order to register or transfer ownership of a vehicle.

Read More »

BMC-84 vs. BMC-85 Surety Bonds

Jul 24 Posted on

BMC-84 surety bonds and BMC-85 lines of credit have some things in common, but it�s important to understand their differences. Learn more about these bonds below, and contact Single Source Insurance today to speak with an agent regarding your bonding needs or to apply for a bond.

What Are They?

The U.S. government, specifically the Federal Motor Carrier Safety Administration, or FMCSA (an agency of the Department of Transportation), gives freight brokers and freight forwarders two options for meeting its $75,000 requirement for funds to cover possible claims made against them by shippers or carriers. Meeting this requirement is a condition for obtaining and keeping a license to operate legally within the United States. The two options are:

  • A surety bond (known as BMC-84) in the amount of $75,000.
  • A trust (BMC-85) secured by $75,000 in cash, an irrevocable letter or credit or line of credit, or a combination of cash and LOC

The names �BMC-84� and �BMC-85� come from the names of the forms that must be filed with the FMCSA.

BMC-84 and BMC-85 solutions do not protect a freight broker or freight forwarder from liability. There is liability insurance for that purpose. Rather, BMC-84 and BMC-85 instruments protect truckers and shippers against nonpayment by freight brokers or forwarders that owe them money.

Who Needs Them?

Since BMC-84 or BMC-85 coverage for claims is a federal licensing requirement, purchasing it is mandatory for freight brokers and forwarders doing business in the United States. Because BMC-85�s require a large amount of cash, smaller freight brokers and carriers typically opt for the BMC-84 surety bond instead.

How Do They Work?

A BMC-84 bond works like other surety bonds that are categorized as license and permit bonds. There are three parties involved in the surety bond agreement:

  • The obligee that requires the purchase of a bond (FMCSA)
  • The principal required to purchase a bond (the freight broker or forwarder)
  • The company that issues the bond (the surety)

The bond obligates the principal to abide by all applicable laws and industry standards, including payment of fees owed to truckers and shippers. Failure to comply with the terms of a BMC-84 bond related to payment of transportation fees can result in a trucker or shipper filing a claim against the bond.

The surety will investigate each claim and make sure it is valid and then try to negotiate a settlement with the claimant. If no settlement is reach, the surety will pay the claim on behalf of the principal, but the principal must subsequently reimburse the surety. An indemnification clause in the surety bond contract makes the principal solely responsible for paying valid claims.

The main difference for freight brokers and forwarders who establish a BMC-85 trust instead of purchasing a BMC-84 surety bond is that the cash or LOC needed to pay claims is already held in the trust and is used for direct claims payments by the trust company to truckers and shippers with valid nonpayment claims.

What Do They Cost?

The annual premium payment for a BMC-84 bond is a small percentage of the required $75,000 bond amount. The surety sets that percentage based largely on the applicant�s credit score. For people with acceptable credit, the premium rate will typically be from 1% to 5%. People with serious credit challenges can still get a bond but may pay a higher premium rate.

If you choose the BMC-85 option, in addition to funding the required trust with $75,000 up front, you�ll also pay an annual administrative fee to the bank or trust company. This fee is generally in the neighborhood of $1,500 per year.

Get Bonded Today

If you�ve decided that a BMC-84 bond is right for you, apply online today with Single Source Insurance. Our experienced agents can also help to discuss your needs so you can decide between a BMC-84 and BMC-85.

Read More »

Do You Need a Surety Bond to Obtain a Liquor License?

Jul 24 Posted on

The short answer is: it depends. Whether or not you will need a surety bond in order to obtain a liquor license depends on the state in which you will operate your business. Not all states require an alcohol surety bond as a condition for obtaining a liquor license. Learn more below, and contact Single Source Insurance today to discuss your bonding needs with an experienced agent.

What is a Liquor License Bond?

A liquor license bond (aka alcohol bond) is a type of license and permit bond required in many states as part of the process for becoming licensed to sell liquor for consumption on or off the seller’s premises. Some municipalities also issue local licenses and require a surety bond from licensees. Other types of alcohol surety bonds may be required in order to engage in other alcohol-related businesses, such as brewing, distilling, transporting, warehousing, or wholesaling alcoholic beverages, but our focus in this article is solely on surety bonds needed by those applying for or renewing a liquor license.

The purpose of a liquor license bond is to ensure a licensee�s compliance with all applicable state laws governing the sale of alcohol. It guarantees the payment of taxes due on alcohol sales and any fines incurred by violating the law�for example fines for selling alcohol to a minor.

Who Needs It?

Anyone applying for or renewing a liquor license in a state and/or municipality that imposes a requirement for a liquor license bond must purchase one.

How the Process Works

The bond brings three parties together in a legally binding agreement:

  • The government agency requiring the bond (the obligee)
  • The liquor license applicant or licensee (the principal)
  • The company underwriting and issuing the liquor license bond(the surety)

The obligee sets the required bond amount, also known as the penal amount of the bond. Though this amount varies from state to state, it�s usually no higher than $10,000.

If the principal fails to remit the proper tax payments to the obligee as required, the obligee may file a claim against the bond in the amount of the unpaid taxes plus any fines.

The surety will determine the validity of a claim and try to negotiate a settlement. When no settlement is forthcoming, the surety will typically pay the claim on behalf of the principal. However, the fact that the surety pays a claim in advance does not let the principal off the hook. Nearly all surety bonds indemnify the surety and obligate the principal to reimburse the surety for claims already paid.

What Does It Cost?

The surety establishes the specific premium rate for each applicant based on the principal�s personal credit score and other factors pertaining to his or her creditworthiness, financial strength, and the likelihood of claims. Applicants with good credit may pay as little as 1% of the required bond amount. Those with poorer credit will likely pay more.

Get Bonded Today

Let the experts at Single Source Insurance help you determine the bonds you need for your alcohol-related business, or request a quote today.

Read More »

What is an NMLS Electronic Surety Bond?

Jul 24 Posted on

An NMLS electronic surety bond (ESB) only differs from a traditional paper surety bond in one respect: the method of delivery. Instead of having to be printed and mailed to the obligee, an ESB is delivered by being uploaded electronically through the NMLS portal.

NMLS stands for the Nationwide Multistate Licensing System (originally known as the Nationwide Mortgage Licensing System & Registry). Created to facilitate state-level management of licensing for the mortgage industry, its purpose has been broadened to include licensing of non-depository financial services companies, such as collection agencies, money transmitters, and non-mortgage lenders.

Existing paper surety bonds are being converted to electronic bonds, and new license bonds in the financial services industry are being issued in ESB form as more and more state agencies are relying on NMLS to efficiently track the fulfillment of surety bond requirements.

Who Needs It?

Today, the majority of people seeking licensing in the financial services industry are actually obtaining an NMLS electronic surety bond. The specific type of surety bond you need to obtain (typically a license and permit bond), the required bond amount, and the terms and conditions of the bond are communicated to license applicants at the time of application. You can easily check this map to see whether your state has adopted NMLS ESB and is no longer accepting traditional paper surety bonds. As of this writing, all but 18 states have made the switch.

How the Process Works

The front-end of the bond issuance process has not changed. A bond applicant still provides the same information to the surety company outside of NMLA. The underwriting process also remains the same. The only real change is that the surety company creates the bond and any riders in NMLS (rather than by filling out paper forms) and submits the bond and any riders to NMLS through the electronic portal.

From a legal standpoint, an ESB and a paper surety bond are identical. They use the same language and create the same legal obligations for each party�the state agency requiring the license bond (the obligee), the financial services industry professional required to obtain the bond as a condition of licensing (the principal), and the company underwriting and issuing the bond (the surety).

What is different is the improved ability of state licensing agencies to coordinate and share information across state lines and with certain federal agencies, which in turn improves their ability to protect consumers.

What Does It Cost?

There is no additional cost to you to obtain an ESB compared to a traditional paper bond. The cost of an ESB is still calculated by the surety as a percentage of the total bond amount required by the obligee.

Get Bonded Today

Our experienced and knowledgeable staff welcomes any questions you may have about electronic surety bonds. Single Source Insurance is a leading provider of surety bonds nationwide. Browse our site or contact us today to get the bonds you need at competitive rates.

Read More »

Where Can You Purchase a Surety Bond?

Jul 24 Posted on

If you�re looking for information on where you can purchase a surety bond, you�ve come to the right place. Single Source Insurance is a nationwide provider of a full range of bonds. We offer quick turnarounds and competitive rates. Browse our site to find the bonds you need, or contact us to speak with a knowledgeable agent today.

Who Sells Surety Bonds?

Most companies that sell surety bonds are insurance companies or subsidiaries of insurance companies. Some surety bond providers are affiliated with banks, and some are completely independent.

  • Bond producers are essentially agents or brokers who work with a network of companies that underwrite and issue surety bonds, though some may have an exclusive arrangement with a single surety bond company. Producers with a large network have the advantage of being able to obtain competitive quotes for a bond applicant, resulting in a lower bond cost. Producers typically help applicants gather information and documents that can help them meet a surety bond company’s underwriting requirements. A bond producer may be the best option for someone who has no experience purchasing a surety bond.
  • Property and casualty insurance companies often are also in the surety bond business. Working with an insurance company cuts out the middleman and may be an appropriate option for those who have obtained surety bonds in the past and understand the process.

How Do I Choose a Surety Bond Provider?

No matter how highly rated a surety bond provider may be, you can only use its services if it is 1) licensed to conduct business in your state and 2) approved by the party requiring you to obtain a bond�i.e. the obligee protected by the surety bond agreement.

Licensed in Your State

Many surety bond providers are licensed in multiple states, so just make sure your state is one of them. The United State Treasury, Bureau of the Fiscal Service maintains contact information for state insurance departments that license surety bond companies, so you can check to see whether a given surety bond provider is licensed in your state.

At Single Source Insurance, we are pleased to hold licenses to provide many bond types nationwide.

Certified for Federal Contracts

If you do business with the federal government, which is often the case with construction contractors, you’ll need to make sure that you choose a surety company that is certified to issue bonds for federal contracts. The U.S. Treasury Department also maintains a list of certified surety bond companies approved to issue surety bonds for federal contracts.

SBA Approved

If you�re thinking about applying for a Small Business Administration (SBA) surety bond guarantee, you�ll need to find a participating surety bond provider that is licensed in your state. A list of approved agents  is available from the SBA Surety Bond Guarantee Program.

Highly Rated

Look for a surety bond provider that is highly rated by AM Best, a private agency that assigns ratings to surety companies. Look for a company that is rated �A� or better. Click here for definitions of the various ratings assigned by AM Best.

Get Bonded Today

Finding the right provider to meet your surety bond needs can save you time and money and enable you to focus on growing your business. At Single Source Insurance, we�ll gladly answer any questions that will help you decide whether we�re the right surety bond company for you.

Read More »

Surety Bond FAQ: Top Questions Answered

Jul 15 Posted on

Surety bonds can be complex. It�s understandable that we get many questions about bonding requirements and the underwriting process. To help answer some of the most common questions, we�ve put together a comprehensive FAQ. If you would like to request a quote or need any help with answering your questions, contact an Single Source Insurance agent today!

What’s The Purpose of a Surety Bond?

A surety bond serves as a guarantee that the party requiring the bond (the obligee) will not suffer a financial loss as the result of the actions of the party purchasing the bond (the principal). The bond is a legally binding contract that spells out the specific things the principal must and must not do to avoid claims being filed against the bond.

How Does a Surety Bond Work?

A surety bond is a legally binding contract among three parties: the obligee that requires the bond, the principal that purchases the bond, and the surety that underwrites and issues the bond. The bond contract specifies the terms and conditions the principal must abide by so as not to incur claims against the bond. It also specifies the maximum amount that will be paid out on any claim.

Some people aren�t clear on the difference between insurance and surety bonds. Both provide protection against the risk of financial loss. However, when you buy insurance, you are the one protected. When you buy a surety bond, it�s the obligee (the party requiring the bond) that is protected against loss. The individual purchasing the bond, the principal, is ultimately responsible for paying out on valid claims.

Can Anyone Get a Surety Bond?

Surety bonds are required for a wide variety of purposes, but in most cases, a surety company�s decision to issue a bond is based entirely on the applicant�s personal credit score and financial resources. Even people with bad credit can usually get bonded, though they will likely pay a higher premium rate than someone with good credit.

Note that some bonds guarantee that the principal will uphold certain professional or industry standards or abide by certain regulations. In such instances, the surety company may also take into consideration the applicant�s industry experience and past performance.

Do I Need a Surety Bond?

People typically purchase a surety bond because they are required to do so as a condition of obtaining or doing something they want or need. Here are common examples of when a bond is required:

The obligee requiring you to purchase a surety bond will let you know what type of bond is required.

What Happens When a Claim Is Filed?

Any violation of a surety bond contract by the principal can trigger a claim, which the surety will investigate. If a claim is found to be valid, the surety will attempt to negotiate a settlement, but if an agreement cannot be reached, the surety typically pays the claim. However, this payment is essentially an advance to the principal, who is legally responsible for paying claims. The principal must subsequently reimburse the surety in full.

Do Surety Bonds Expire?

Every surety bond expires eventually if it is not renewed. The question is, how long does the obligee require a surety bond to be in place? Here are some examples:

  • A contractor payment bond for a project that will be completed within a year might have a bond term of one year.
  • A car dealer�s license bond in a state where the dealer’s license must be renewed every two years might have a bond term of two years, with an expiration date that coincides with the license expiration date.
  • Other bonds. Some bonds may need to be in place for a significant period of time, such as a court bond for someone serving as a guardian for a minor or custodian for an incompetent adult.

At the end of the bond term, a bond must be renewed or extended. Some bonds are not renewable, and in such cases, a replacement bond must be purchased.

Are Surety Bonds Refundable?

Under certain circumstances, some surety bonds may be refundable. If a refund is permitted, it�s generally shortly after the bond was purchased.

There are a number of reasons why a person might request a refund on a surety bond. For example, someone purchases a contractor�s license bond after taking the examination required as part of the licensing process. A few days later, they learn that they failed the exam and decide to spend the next year preparing to retake the exam. Since they can�t obtain a license yet, they want a refund on the bond, which the surety company may or may not grant.

There are no hard and fast rules about refunds on bonds, and surety companies can exercise their own discretion in such matters. Generally at the time a bond is purchased, it is considered to be �fully earned� for the first year of the bond term, so mid-year refunds are rare. However, if you purchase a bond with a multiple year term and pay the premium up front for all years, then find before the end of the first year that you don�t need it any longer, you may be able to get a refund for the premiums paid in advance for year two and beyond. Speak with an agent for assistance.

How Often Do You Pay For A Surety Bond?

Unlike insurance premiums, which typically can be paid monthly or quarterly, surety bond premiums are generally paid in full at the time of purchase. For bonds with a term of only one year, that�s usually not a financial hardship for the purchaser. However, premiums for guardianship bonds and custodian bonds required of people caring for minors must be paid in advance for the number of years remaining until the minor reaches age 18. So a guardian of a four-year old child will have to pay the premium for 14 years of coverage at the time a guardianship bond is purchased.

Surety bond companies may agree to finance surety bonds with annual premiums above a certain amount, typically $1,000 or $1,500. The purchaser must meet certain financial criteria, and the bond must be cancellable, so that the surety can cancel it if the purchaser fails to make payments as called for in the financing agreement.

How Do I Get A Surety Bond?

The process of applying for a surety bond is rather simple, and most companies that sell surety bonds offer the ability to apply for a bond online. The hard part is choosing the right surety company.

Get a surety bond online from Single Source Insurance, and get on with business. We are licensed across the country and offer a comprehensive selection of the best performance bonds and surety bonds at the best prices to keep you in compliance with all of your industry regulations.

How Long Does It Take To Get Bonded?

When you apply for a surety bond online, you can often get approval immediately, as long as you have provided all of the information the surety needs and you meet all of the approval criteria. The time it takes for your bond to be issued once your application has been approved will depend on how quickly you pay the bond premium and return a signed copy of the bond agreement. Once those tasks have been accomplished, you should have the bond certificate within a day or two.

What’s The Difference Between a License Bond and a Contract Bond?

There are different bonds for different purposes. License bonds and contract bonds serve two very different purposes.

Purchasing a license bond is a prerequisite for obtaining a license to do business in a given state. License bonds are required for a number of professions and businesses, and the list varies from state to state. Two common example are auto dealer license bonds and contractor bonds. A license bond guarantees that the bonded individual (the principal) will conduct business in accordance with all applicable laws, regulations, and industry standards. It protects the state and consumers against financial loss stemming from the principal’s unlawful or unethical actions.

View License & Permit Bonds

A contract bond guarantees that the bonded individual, often a general construction contractor, completes a project in accordance with all contract terms and specifications. It protects the project owner, often the state agency sponsoring a public works construction project, against financial loss resulting from the principal’s violation of any contract terms and conditions, including defaulting on the contract and failing to complete the project.

View Contract Bonds

What Is A Fidelity Bond?

A fidelity bond protects business owners from financial loss resulting from the dishonest or fraudulent acts of employees. The two main types of fidelity bonds are business services bonds and employee dishonesty bonds.

Businesses that send employees out to do work at a client�s location, such as house painters, cleaning services, and landscapers often voluntarily purchase a business services bond. A business services bond provides protection against financial losses due to the theft of or damage to the client’s property by an employee while on the client’s premises. Buying this type of bond can give new clients the confidence to hire you and gives you an advantage over non-bonded competitors.

An employee dishonesty bond protects a business owner against losses due to theft, fraud, embezzlement and similar dishonest acts committed by one or more employees. It can be a blanket bond that covers all employees, or it can designate only specific named individuals.

Can I Get a Bond If I Have Bad Credit?

Yes, you can. Nearly all surety bond companies offer bad credit programs. You may pay a higher rate than you would if you had good credit, but you should be able to get the bond you need.

Apply for a bad credit bond.

What Is Personal Indemnity?

Virtually all surety bond contracts include a personal indemnity clause. Signing it makes you legally liable to reimburse the surety company for any claims or other costs they pay on your behalf. This indemnity clause is also commonly known as a �hold harmless� agreement.

Do Court Bonds Require Collateral?

Due to the large sums of money often involved in situations requiring court bonds, collateral is often required in order to purchase a bond, especially if the person applying for the bond has bad credit. The collateral must be equal to 100% of the required bond amount.

Collateral can be in the form of cash or an irrevocable letter of credit. Real estate and other assets that cannot easily be liquidated are not accepted by a surety company as collateral. However, a bank might accept such illiquid assets as collateral for an irrevocable letter of credit that would meet the surety company’s collateral requirements.

What Should I Note As My Effective Date?

The effective date of a surety bond is the date that it becomes active. There is no coverage for losses incurred prior to the bond�s effective date. The obligee requiring you to purchase the bond should tell you what the effective date must be. In the case of a license bond, the effective date must be prior to the issue date of the license.

How Do I Know The Bond Amount I Need?

The bond amount is established by the obligee requiring you to purchase the bond. It is also referred to as the penal amount of the bond.

What’s The Difference Between Surety Bonds & Insurance?

Insurance provides financial protection for the person that purchases it. An insurance policy transfers financial risk from the insured to the insurer.

A surety bond protects the obligee that requires its purchase. It transfers financial risk from the obligee to the person purchasing the bond (the principal).

What If I Have Another Question?

At Single Source Insurance, our surety bond experts will gladly address these and any other questions you may have. Contact us today for assistance.

Read More »

What Happens When a Claim is Filed against a Surety Bond?

Jul 10 Posted on

The claims process is a crucial part of any bond. It�s important to understand what happens when a claim is filed against a bond so that you can know your responsibilities and what�s expected of each party involved. Here�s what you need to know.

What is a Surety Bond?

A surety bond is a legal contract that brings together three parties in a legally binding agreement. The purpose of a surety bond is to protect one party in the agreement against financial loss resulting from the actions of another party, through a third party�s issuance of a guarantee. These three parties are referred to by the role they play in a surety bond agreement:

  • The obligee is the party that gains protection by requiring the purchase of a surety bond.
  • The principal is the party required to obtain the surety bond for the protection of the obligee.
  • The surety is the company that underwrites and issues the surety bond.

Surety bonds are used in many industries. They�re broadly categorized as:

  • License and permit bonds, which are required as part of the process of licensing or registering a business and guarantee that the principal will conduct business in a lawful and ethical manner.
  • Contract bonds, which guarantee that contracted work will be done in accordance with all contract terms and provisions and provide financial protection for the obligee in the event of contract default or non-performance.
  • Court bonds, which are required by a court in specific situations to guarantee compliance with court orders, protect property belonging to plaintiffs and/or defendants in contested legal matters, or ensure that fiduciary responsibilities live up to their obligations.

What Can Trigger a Claim on a Bond?

The principal�s violation of the terms and conditions of a surety bond can trigger a claim on the bond. For example, a construction contract might violate the terms of a contract bond by failing to complete the work as specified in the bond. The obligee would suffer a financial loss from having to hire another contractor to complete the project. That would constitute grounds for filing a claim against the contract bond.

As another example, if a court-appointed executor of an estate embezzled funds from the estate, causing a financial loss to the beneficiaries of the estate, the court, as obligee, would have grounds to file a claim against the bond to offset that loss.

The best way for any principal to avoid claims being filed against a surety bond is simply to avoid violating the terms and conditions of the bond in the first place. As they say, an ounce of prevention is worth a pound of cure.

What Does the Claims Process Involve?

The surety�s first priority is to ascertain the validity of any claim submitted against the bond. The surety will investigate the matter and reject the claim if it is determined to be illegitimate. If the claim is found to be valid, however, the surety will ensure that the claimant is compensated.

The ultimate burden of paying claims belongs to the principal, as virtually all surety bonds include a clause that indemnifies the surety. In some cases, if a settlement cannot be reached, the surety will simply inform the principal of the amount that the principal must pay directly to the claimant. In other cases, the surety will pay the claimant initially and then collect reimbursement from the principal. Sometimes, the surety will make an arrangement that allows the principal to reimburse the surety in installments over a specified period of time.

Have Bond Questions?

There are a number of factors to consider when choosing a surety bond provider. The agents at Single Source Insurance are experienced and happy to help answer your questions. Contact us today to see what our experienced surety bond professionals can do for you.

Read More »

What to Look for in the Best Surety Bond Companies

Jul 10 Posted on

There are plenty of reputable surety bond companies to choose from, but that doesn�t mean they�re all equally able to meet your specific needs. The first step in selecting the right company is to define your selection criteria. Here�s what to look for in the best surety bond companies.

Type of Bonds

Most surety bond companies can get you any type of bond you need, but some may have more experience than others with a particular type of bond. If you need a bid bond or a performance bond bond, you may do best with a surety bond provider that focuses on construction bonds and knows the construction industry well.

Explore Single Source Insurance Bonds

Licensure

It�s common for surety bond companies to be licensed to do business in many states, or even all states. Still, it�s essential to make sure that the company you choose can legally issue bonds in your state. At Single Source Insurance, we offer bonds in all states. It�s easy to browse by state on our site!

Bond Capacity

A bond company�s per-customer single bond and aggregate bond limit isn�t likely to be a concern for the occasional bond purchaser. But it can be a big deal for companies that need large bond amounts (which is often the case with construction contractors), or who need to be bonded in multiple states. If you have substantial bonding needs or plan to expand into additional states, make sure you select a surety company with sufficient bonding capacity.

Customer Service

As a consumer, you probably rank customer service near the top of the list in the companies you do business with. Customer service quality is just as important, if not more so, when choosing a surety bond company. Look for a firm that has a reputation for being responsive to customers� needs and easy to work with.

One customer service consideration is whether small businesses get the same kind of attention from a given surety bond provider that larger ones do. If purchasing a surety bond is a one-time or rare occurrence for you, try to get an idea of how willing the company is to devote time to educating and helping you.

The best way to ensure you choose a company that provides great customer service is to check online ratings sites and look for reviews posted by those who have done or are doing business with the company you�re considering.

Single Source Insurance currently has a 5-star Google rating and an A+ BBB Rating.

A.M. Best Rating

Your obligee is more likely to accept a bond from a company that is highly rated by A.M. Best, the rating service that companies nationwide rely upon to assess a surety bond company’s financial strength and ability to meet its contractual obligations. Look for a company with an A.M. Best rating of A+ (superior) or A (excellent).

Treasury Listing

If you need to obtain a surety bond in order to do business with the federal government (for example, as a contractor on a federally funded public works project), look for a surety bond company that is �T-Listed,� or on the Department of Treasury�s List of Approved Sureties.

Trust Single Source Insurance

At Single Source Insurance, our experienced surety bond professionals will gladly answer any questions you may have about the bond you need and how we can help you get it. Contact us today for assistance.

Read More »